Well, low risk is a relative term. Doing the same credit spread 5-7 weeks before expiration is definitely lower risk. You at least can manage those trades and the loss will not accumulate so quickly even if the underlying gaps. Take a look at the link I posted, it compares two trades with different expirations.
which option advisory is best for new trader
- Thread starter jesse1
- Start date
Well, low risk is a relative term. Doing the same credit spread 5-7 weeks before expiration is definitely lower risk. You at least can manage those trades and the loss will not accumulate so quickly even if the underlying gaps. Take a look at the link I posted, it compares two trades with different expirations.
Thanks - good information. Other than credit spreads, are there any other option strategies you would consider low risk? If you were to design a portfolio of low risk option strategies, which ones would you include?
All spread strategies (calendars, butterflies, etc.) are RELATIVELY low risk if opened not close to expiration.
It is too close for me.
It doesn't mean it cannot work - in fact, many times it will. But when it doesn't, the loss can be brutal. Those are speculative trades, and should be handled accordingly. They are NOT low risk trades like many services would like you to think.
None. None is the best advisory service for new traders.
Most people don't want to pay for their education. This is why 90% of retail investors lose money in the stock market.
"If you think education is expensive, try ignorance." - Derek Bok
I signed up for the free 2-week trial and on Monday, July 28 they sent me this trade when the S&P500 was at 1973.70.
- Date: Monday, July 28, 2014
- Time: 7:10 AM PST
- Expiration: Friday, August 1, 2014
- This Week's Trade Type: IRON CONDOR
- Order Type: LIMIT ORDER
- SELL: AUGUST1 SPX 2010 CALL
- BUY: AUGUST1 SPX 2015 CALL
- SELL: AUGUST1 SPX 1930 PUT
- BUY: AUGUST1 SPX 1925 PUT
- CURRENT CREDIT: $.25 cents
- Premium collected on 20 lots: $500 minus commission.
The S&P500 is now at 1,930.67 and if the trade was entered the P/L would be about -$4,000 with one day to expiry. They do say that subscribers will be notified immediately to exit trades, but in this case no notification has been received.
A trade like this is too risky for a measly $500.00.
To all those thinking of starting a newsletter.
make bold predictions. send out 2 different emails. One all CALLS and one all PUTS... so at least 1/2 will think you are genius. (i know you can sell puts and sell calls...i just mean directional debit recommendations at first, then get more complicated). remember to complain about emails to the other 1/2 and say you sent out exit at breakeven. some might just believe you.
repeat until you get a good base.
make bold predictions. send out 2 different emails. One all CALLS and one all PUTS... so at least 1/2 will think you are genius. (i know you can sell puts and sell calls...i just mean directional debit recommendations at first, then get more complicated). remember to complain about emails to the other 1/2 and say you sent out exit at breakeven. some might just believe you.
repeat until you get a good base.